Second quarter revenues of $5.1 billion increased 12 percent from the
same quarter in 2016. Higher demand for trucks and construction
equipment in North America and China, and stronger sales to mining, and
oil & gas customers were the main drivers of revenue growth. Currency
negatively impacted revenues by approximately 1 percent compared to last
year, primarily due to the appreciation of the US dollar. Revenues in
North America increased 13 percent and international sales grew 11
percent due to strong demand in China and India.

Net income attributable to Cummins in the second quarter was $424
million ($2.53 per diluted share), compared to $406 million ($2.40 per
diluted share) in the same quarter a year ago. The tax rate in the
second quarter of 2017 was 26.4 percent.

Earnings before interest and taxes (EBIT) was $620 million, or 12.2
percent of sales, compared to $591 million or 13.1 percent of sales a
year ago.

“We delivered strong revenue growth in all four operating segments in
the second quarter due to improving conditions in a number of important
markets where we also have leading share. Earnings increased due to
solid operational performance, partially offset by higher warranty costs
that resulted in second quarter EBIT that was below our expectations”
said Chairman and CEO Tom Linebarger. “As a result of stronger than
expected orders in truck and construction markets in North America and
China, and improving demand from global mining customers we have raised
our 2017 full year outlook.”

Through the end of the second quarter, the Company has returned $463
million to shareholders in the form of dividends and share repurchase
and recently raised its quarterly cash dividend by 5.4 percent. Cummins
plans to return 50 percent of its Operating Cash Flow to shareholders in
2017.

The Company continues to execute its strategy to be the leading global
powertrain supplier. Cummins and power management company Eaton
(NYSE:ETN) have successfully completed the formation of the Eaton
Cummins Automated Transmission Technologies joint venture that was
announced on April 10, 2017. Cummins and Eaton each own 50 percent of
the global joint venture which will design, manufacture, sell and
support all future medium-duty and heavy-duty automated transmissions
for the commercial vehicle market. Eaton’s current medium-duty automated
transmission, Procision®, and next generation heavy-duty automated
transmissions, will be part of the business which will also market,
sell, and support Eaton’s current generation of automated heavy-duty
transmissions to OEM customers in North America. Today marks the first
day of operations for the joint venture and the financial results will
be consolidated within Cummins’ Components Segment. We are still in the
process of completing the purchase accounting associated with our
investment in this new venture, as required by GAAP1, but we
do not currently expect the joint venture to have a material impact on
Cummins’ financial results in 2017.

Based on the current forecast, Cummins expects full year 2017 revenues
to be up 9 to 11 percent, higher than the prior forecast of up 4 to 7
percent. EBIT is expected to be in the range of 11.75 to 12.5 percent of
sales, unchanged from prior guidance. This forecast excludes the impact
of our new Eaton Cummins Automated Transmission Technologies joint
venture.

Other recent highlights:

Cummins announced the election of two new members to its Board of
Directors - Karen Quintos, Chief Customer Officer, Dell Technologies
and Rich Freeland, Cummins President and Chief Operating Officer

DiversityInc named Cummins one of the Top 50 Companies for Diversity
for the eleventh consecutive year. Cummins ranked No. 21 on the 2017
annual list, which included more than 1,000 participating companies

1 Generally Accepted Accounting Principles

Second quarter 2017 detail (all comparisons to same period in 2016)

Engine Segment

Sales - $2.3 billion, up 15 percent.

Segment EBIT - $277 million, or 12 percent of sales, compared to 206
million or 10.3 percent of sales a year ago

EBIT in the second quarter of 2017 reflects a $31 million accrual for
the estimated costs of a quality campaign

Increased demand in mining and oil & gas markets was the primary
driver of revenue growth

About Cummins

Cummins Inc., a global power leader, is a corporation of complementary
business units that design, manufacture, distribute and service diesel
and natural gas engines and related technologies, including fuel
systems, controls, air handling, filtration, emission solutions and
electrical power generation systems. Headquartered in Columbus, Indiana,
(USA) Cummins currently employs approximately 55,400 people worldwide
and serves customers in approximately 190 countries and territories
through a network of approximately 600 company-owned and independent
distributor locations and approximately 7,400 dealer locations. Cummins
earned $1.39 billion on sales of $17.5 billion in 2016. Press releases
can be found on the Web at www.cummins.com.
Follow Cummins on Twitter at www.twittter.com/cummins
and on YouTube at www.youtube.com/cumminsinc.

Forward-looking disclosure statement

Information provided in this release that is not purely historical are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements regarding our
forecasts, guidance, preliminary results, expectations, hopes, beliefs
and intentions on strategies regarding the future. These forward looking
statements include, without limitation, statements relating to our plans
and expectations for our revenues for the full year of 2017. Our actual
future results could differ materially from those projected in such
forward-looking statements because of a number of factors, including,
but not limited to: the adoption and implementation of global emission
standards; the price and availability of energy; the pace of
infrastructure development; increasing global competition among our
customers; general economic, business and financing conditions;
governmental action; changes in our customers’ business strategies;
competitor pricing activity; expense volatility; labor relations; and
other risks detailed from time to time in our Securities and Exchange
Commission filings, including particularly in the Risk Factors section
of our 2016 Annual Report on Form 10-K. Shareholders, potential
investors and other readers are urged to consider these factors
carefully in evaluating the forward-looking statements and are cautioned
not to place undue reliance on such forward-looking statements. The
forward-looking statements made herein are made only as of the date of
this press release and we undertake no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise. More detailed information about factors that
may affect our performance may be found in our filings with the
Securities and Exchange Commission, which are available at http://www.sec.gov
or at http://www.cummins.com
in the Investor Relations section of our website.

Presentation of Non-GAAP Financial Information

EBIT is a non-GAAP measure used in this release, and is defined and
reconciled to what management believes to be the most comparable GAAP
measure in a schedule attached to this release. Cummins presents this
information as it believes it is useful to understanding the Company's
operating performance, and because EBIT is a measure used internally to
assess the performance of the operating units.

Webcast information

Cummins management will host a teleconference to discuss these
results today at 10 a.m. EST. This teleconference will be webcast and
available on the Investor Relations section of the Cummins website atwww.cummins.com. Participants wishing to view the visuals available with the audio
are encouraged to sign-in a few minutes prior to the start of the
teleconference.

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited) (a)

Three months ended

In millions, except per share amounts

July 2, 2017

July 3, 2016

NET SALES

$

5,078

$

4,528

Cost of sales

3,829

3,331

GROSS MARGIN

1,249

1,197

OPERATING EXPENSES AND INCOME

Selling, general and administrative expenses

596

524

Research, development and engineering expenses

174

155

Equity, royalty and interest income from investees

98

88

Loss contingency

—

39

Other operating income (expense), net

18

—

OPERATING INCOME

595

567

Interest income

5

6

Interest expense

21

16

Other income (expense), net

20

18

INCOME BEFORE INCOME TAXES

599

575

Income tax expense

158

148

CONSOLIDATED NET INCOME

441

427

Less: Net income attributable to noncontrolling interests

17

21

NET INCOME ATTRIBUTABLE TO CUMMINS INC.

$

424

$

406

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.

Basic

$

2.53

$

2.41

Diluted

$

2.53

$

2.40

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

167.3

168.8

Diluted

167.8

169.0

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

1.025

$

0.975

(a)

Prepared on an unaudited basis in accordance with accounting
principles generally accepted in the United States of America.

Six months ended

In millions, except per share amounts

July 2, 2017

July 3, 2016

NET SALES

$

9,667

$

8,819

Cost of sales

7,290

6,566

GROSS MARGIN

2,377

2,253

OPERATING EXPENSES AND INCOME

Selling, general and administrative expenses

1,133

1,014

Research, development and engineering expenses

332

321

Equity, royalty and interest income from investees

206

160

Loss contingency

—

39

Other operating income (expense), net

23

(2

)

OPERATING INCOME

1,141

1,037

Interest income

7

12

Interest expense

39

35

Other income (expense), net

38

26

INCOME BEFORE INCOME TAXES

1,147

1,040

Income tax expense

301

280

CONSOLIDATED NET INCOME

846

760

Less: Net income attributable to noncontrolling interests

26

33

NET INCOME ATTRIBUTABLE TO CUMMINS INC.

$

820

$

727

EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CUMMINS INC.

Basic

$

4.90

$

4.27

Diluted

$

4.88

$

4.26

WEIGHTED AVERAGE SHARES OUTSTANDING

Basic

167.4

170.3

Diluted

167.9

170.5

CASH DIVIDENDS DECLARED PER COMMON SHARE

$

2.05

$

1.95

(a)

Prepared on an unaudited basis in accordance with accounting
principles generally accepted in the United States of America.

Common stock held by employee benefits trust, at cost, 0.6 and 0.7
shares

(7

)

(8

)

Accumulated other comprehensive loss

(1,615

)

(1,821

)

Total Cummins Inc. shareholders’ equity

7,493

6,875

Noncontrolling interests

329

299

Total equity

$

7,822

$

7,174

Total liabilities and equity

$

16,260

$

15,011

(a)

Prepared on an unaudited basis in accordance with accounting
principles generally accepted in the United States of America.

CUMMINS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited) (a)

Six months ended

In millions

July 2, 2017

July 3, 2016

CASH FLOWS FROM OPERATING ACTIVITIES

Consolidated net income

$

846

$

760

Adjustments to reconcile consolidated net income to net cash
provided by operating activities

Depreciation and amortization

284

259

Deferred income taxes

—

2

Equity in income of investees, net of dividends

(132

)

(87

)

Pension contributions in excess of expense

(44

)

(82

)

Other post-retirement benefits payments in excess of expense

(8

)

(17

)

Stock-based compensation expense

23

20

Restructuring payments

—

(42

)

Loss contingency

—

39

Translation and hedging activities

31

(45

)

Changes in current assets and liabilities

Accounts and notes receivable

(488

)

(252

)

Inventories

(264

)

(101

)

Other current assets

21

189

Accounts payable

403

143

Accrued expenses

132

(209

)

Changes in other liabilities and deferred revenue

103

129

Other, net

(81

)

32

Net cash provided by operating activities

826

738

CASH FLOWS FROM INVESTING ACTIVITIES

Capital expenditures

(182

)

(189

)

Investments in internal use software

(40

)

(27

)

Investments in and advances to equity investees

(64

)

(17

)

Investments in marketable securities—acquisitions

(69

)

(379

)

Investments in marketable securities—liquidations

162

237

Cash flows from derivatives not designated as hedges

19

(21

)

Other, net

14

5

Net cash used in investing activities

(160

)

(391

)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings

2

109

Net (payments) borrowings of commercial paper

(78

)

200

Payments on borrowings and capital lease obligations

(29

)

(133

)

Distributions to noncontrolling interests

(10

)

(24

)

Dividend payments on common stock

(343

)

(333

)

Repurchases of common stock

(120

)

(695

)

Other, net

34

(20

)

Net cash used in financing activities

(544

)

(896

)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

51

(117

)

Net increase (decrease) in cash and cash equivalents

173

(666

)

Cash and cash equivalents at beginning of year

1,120

1,711

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

1,293

$

1,045

(a)

Prepared on an unaudited basis in accordance with accounting
principles generally accepted in the United States of America.

CUMMINS INC. AND SUBSIDIARIES

SEGMENT INFORMATION

(Unaudited)

In millions

Engine

Distribution

Components

PowerSystems

IntersegmentEliminations (1)

Total

Three months ended July 2, 2017

External sales

$

1,711

$

1,716

$

1,064

$

587

$

—

$

5,078

Intersegment sales

596

6

390

430

(1,422

)

—

Total sales

2,307

1,722

1,454

1,017

(1,422

)

5,078

Depreciation and amortization (2)

46

31

38

29

—

144

Research, development and engineering expenses

63

4

57

50

—

174

Equity, royalty and interest income from investees

56

13

15

14

—

98

Interest income

2

1

1

1

—

5

Segment EBIT

277

96

190

61

(4

)

620

Segment EBIT as a percentage of total sales

12.0

%

5.6

%

13.1

%

6.0

%

12.2

%

Three months ended July 3, 2016

External sales

$

1,504

$

1,538

$

933

$

553

$

—

$

4,528

Intersegment sales

498

6

346

368

(1,218

)

—

Total sales

2,002

1,544

1,279

921

(1,218

)

4,528

Depreciation and amortization (2)

41

29

32

29

—

131

Research, development and engineering expenses

53

3

51

48

—

155

Equity, royalty and interest income from investees

46

19

12

11

—

88

Loss contingency

39

—

—

—

—

39

Interest income

3

1

1

1

—

6

Segment EBIT

206

87

190

90

18

591

Segment EBIT as a percentage of total sales

10.3

%

5.6

%

14.9

%

9.8

%

13.1

%

(1)

Includes intersegment sales, intersegment profit in inventory
eliminations and unallocated corporate expenses. There were no
significant unallocated corporate expenses for the three months
ended July 2, 2017 and July 3, 2016.

(2)

Depreciation and amortization as shown on a segment basis excludes
the amortization of debt discount and deferred costs included in the
Condensed Consolidated Statements of Income as "Interest expense."

In millions

Engine

Distribution

Components

PowerSystems

IntersegmentEliminations (1)

Total

Six months ended July 2, 2017

External sales

$

3,168

$

3,353

$

2,044

$

1,102

$

—

$

9,667

Intersegment sales

1,162

14

754

797

(2,727

)

—

Total sales

4,330

3,367

2,798

1,899

(2,727

)

9,667

Depreciation and amortization (2)

90

61

75

57

—

283

Research, development and engineering expenses

117

8

107

100

—

332

Equity, royalty and interest income from investees

128

24

28

26

—

206

Interest income

3

2

1

1

—

7

Segment EBIT

506

196

369

118

(3

)

1,186

Segment EBIT as a percentage of total sales

11.7

%

5.8

%

13.2

%

6.2

%

12.3

%

Six months ended July 3, 2016

External sales

$

2,993

$

2,996

$

1,830

$

1,000

$

—

$

8,819

Intersegment sales

985

11

686

729

(2,411

)

—

Total sales

3,978

3,007

2,516

1,729

(2,411

)

8,819

Depreciation and amortization (2)

80

57

63

58

—

258

Research, development and engineering expenses

110

7

107

97

—

321

Equity, royalty and interest income from investees

82

37

20

21

—

160

Loss contingency

39

—

—

—

—

39

Interest income

5

2

2

3

—

12

Segment EBIT

403

174

353

136

9

1,075

Segment EBIT as a percentage of total sales

10.1

%

5.8

%

14.0

%

7.9

%

12.2

%

(1)

Includes intersegment sales, intersegment profit in inventory
eliminations and unallocated corporate expenses. There were no
significant unallocated corporate expenses for the six months ended
July 2, 2017 and July 3, 2016.

(2)

Depreciation and amortization as shown on a segment basis excludes
the amortization of debt discount and deferred costs included in the
Condensed Consolidated Statements of Income as "Interest expense."
The amortization of debt discount and deferred costs was $1 million
for both of the six months ended July 2, 2017 and July 3, 2016.

A reconciliation of our segment information to the corresponding amounts
in the Condensed Consolidated Statements of Income is shown in
the table below:

Three months ended

Six months ended

In millions

July 2, 2017

July 3, 2016

July 2, 2017

July 3, 2016

Total segment EBIT

$

620

$

591

$

1,186

$

1,075

Less: Interest expense

21

16

39

35

Income before income taxes

$

599

$

575

$

1,147

$

1,040

CUMMINS INC. AND SUBSIDIARIESSELECT FOOTNOTE DATA(Unaudited)

EQUITY, ROYALTY AND INTEREST INCOME FROM INVESTEES

Equity, royalty and interest income from investees included in our Condensed
Consolidated Statements of Income for the reporting periods was as
follows:

We define EBIT as earnings before interest expense, income tax expense
and noncontrolling interests in income of consolidated subsidiaries. We
use EBIT to assess and measure the performance of our operating segments
and also as a component in measuring our variable compensation programs.
This measure is not in accordance with, or an alternative for,
accounting principles generally accepted in the United States and may
not be consistent with measures used by other companies. It should be
considered supplemental data. Below is a reconciliation of “Net income
attributable to Cummins Inc.” to EBIT for each of the applicable periods:

Unit shipments by engine classification (including unit shipments to
Power Systems and off-highway engine units included in their respective
classification) were as follows:

2017

Units

Q1

Q2

Q3

Q4

YTD

Heavy-duty

19,200

24,100

—

—

43,300

Medium-duty

60,300

71,600

—

—

131,900

Light-duty

63,100

65,600

—

—

128,700

Total units

142,600

161,300

—

—

303,900

2016

Units

Q1

Q2

Q3

Q4

YTD

Heavy-duty

19,700

20,700

20,100

18,500

79,000

Medium-duty

55,400

62,300

53,400

58,000

229,100

Light-duty

61,700

57,100

49,800

60,000

228,600

Total units

136,800

140,100

123,300

136,500

536,700

Distribution Segment Sales by Product Line

Sales for our Distribution segment by product line were as follows:

2017

In millions

Q1

Q2

Q3

Q4

YTD

Parts

$

745

$

759

$

—

$

—

$

1,504

Service

319

320

—

—

639

Power generation

306

329

—

—

635

Engines

275

314

—

—

589

Total sales

$

1,645

$

1,722

$

—

$

—

$

3,367

2016

In millions

Q1

Q2

Q3

Q4

YTD

Parts

$

648

$

642

$

643

$

694

$

2,627

Service

299

297

299

320

1,215

Power generation

275

326

291

347

1,239

Engines

241

279

271

309

1,100

Total sales

$

1,463

$

1,544

$

1,504

$

1,670

$

6,181

Component Segment Sales by Business

In the first quarter of 2017, our Components segment reorganized its
reporting structure to move an element of the emission solutions
business to the fuel systems business to enhance operational,
administrative and product development efficiencies. Prior year sales
were reclassified to conform with this change.

Sales for our Components segment by product line were as follows:

2017

In millions

Q1

Q2

Q3

Q4

YTD

Emission solutions

$

616

$

674

$

—

$

—

$

1,290

Turbo technologies

287

307

—

—

594

Filtration

277

291

—

—

568

Fuel systems

164

182

—

—

346

Total sales

$

1,344

$

1,454

$

—

$

—

$

2,798

2016

In millions

Q1

Q2

Q3

Q4

YTD

Emission solutions

$

589

$

603

$

522

$

524

$

2,238

Turbo technologies

265

276

241

254

1,036

Filtration

252

262

244

252

1,010

Fuel systems

131

138

136

147

552

Total sales

$

1,237

$

1,279

$

1,143

$

1,177

$

4,836

2015

In millions

YTD

Emission solutions

$

2,449

Turbo technologies

1,141

Filtration

1,010

Fuel systems

572

Total sales

$

5,172

Power Systems Segment Sales by Product Line and Unit Shipments by
Engine Classification

In the first quarter of 2017, our Power Systems segment reorganized its
product lines to better reflect how the segment is managed. Prior year
sales were reclassified to reflect these changes.

Sales for our Power Systems segment by product line were as follows:

2017

In millions

Q1

Q2

Q3

Q4

YTD

Power generation

$

526

$

570

$

—

$

—

$

1,096

Industrial

275

353

—

—

628

Generator technologies

81

94

—

—

175

Total sales

$

882

$

1,017

$

—

$

—

$

1,899

2016

In millions

Q1

Q2

Q3

Q4

YTD

Power generation

$

518

$

602

$

543

$

593

$

2,256

Industrial

215

236

235

255

941

Generator technologies

75

83

78

84

320

Total sales

$

808

$

921

$

856

$

932

$

3,517

2015

In millions

YTD

Power generation

$

2,588

Industrial

1,121

Generator technologies

358

Total sales

$

4,067

High-horsepower unit shipments by engine classification were as follows: